EXCLUSIVE: Lloyd’s chair Nelson eases fears around market’s commitment to London

Lloyd’s chairman John Nelson’s speech this week in which he suggested Lloyd’s will move some operations offshore if passporting rights to the European Union are lost sent shockwaves around the market.

While standing by that statement, however, he has also looked to ease any fears around Lloyd’s commitment to the UK capital.

In exclusive insights given to Intelligent Insurer, Nelson confirmed that an end to single market access would force Lloyd’s to consider other options. “I believe if there is no single market access then businesses will obviously look at how they can best trade with the EU - and that could mean writing their business onshore in the EU,” he said.

“That will have implications for the London market. As it stands just now, London is the global hub of specialist insurance and reinsurance – people can access the EU with ease from London. It is also attractive for inward investment and capital which can then flow into the EU. This will be affected if there is no longer the ease of access that we currently enjoy.”

And he stressed that Lloyd’s itself is also considering its options – including moving operations elsewhere – should access to the single market cease.

But he also moved to stress that the future of the London Market and the role Lloyd’s will play in that remains positive. In what is partly an extension of the market’s existing strategy to extend its network globally, he said the market and London should remain positive about the future.

“The future is good. We remain utterly committed to London and will always be centred here,” he said.

“The eco-system around the Lloyd’s building is built on an expertise and quality underwriting that is unrivalled and that customers will want to access. If you look at Lloyd’s, our largest market remains the United States market and since we started implementing Vision 2025, we have grown our presence in the emerging economies around the world.

“Lloyd’s is not, and cannot be, simply Lloyd’s of London. We are Lloyd’s; local to the countries and territories we operate in – whether it be London or Dubai or Singapore. These remain exciting times for Lloyd’s.”

But he also stressed the importance of securing the right long term deal with Europe, stressing that working in close partnership with government would be crucial.

“The European market is one that Lloyd’s has a long history of trading with and that is one we would like to see continue, from our established markets in Italy or Germany for example through to the emerging markets of the East,” he said.

“Whilst the EU constitutes 11% of our gross written premium, it is still an important market for specialist insurance. Our managing agents and brokers want and expect to access markets across the globe, and obviously the EU and it’s more mature markets and the innovation that you find there makes it important to specialist insurance.”

He continued: “We are making the argument for single market access at all levels of Government and making the case for single market access to the industry as we have done in the last week. I can assure you, we will keep doing so.

“Alongside this we are obviously advancing our plans should single market access cease to become a viable option. Writing business onshore is obviously something we have to examine. We have a team with unrivalled experience in the acquiring and defending of licenses and they are looking at all the possibilities for us.”